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Ginis in General Equilibrium: Trade, Technology and Southern Inequality

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  • Susan Chun Zhu
  • Daniel Trefler

Abstract

Within developing and newly industrialized countries, rising wage inequality is both common and highly correlated with export growth. This is incompatible with the Stolper-Samuelson theorem, but suggestive of a role for technological catch-up. We develop this insight using a model that features both Ricardian and endowments-based comparative advantage. In this model Southern catch-up induces a correlation between rising inequality and export growth. It also induces a shift in trade patterns that results in skill upgrading and rising inequality in both the South and the North. A rudimentary empirical exercise reveals that, as predicted, Southern skill upgrading is correlated with the trade-weighted average rate of Southern catch-up.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8446.

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Date of creation: Aug 2001
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Handle: RePEc:nbr:nberwo:8446

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Cited by:
  1. Angus Deaton, 2004. "Health in an age of globalization," Working Papers 172, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
  2. Vellutini, Charles, 2003. "Capital mobility and underdevelopment traps," Journal of Development Economics, Elsevier, vol. 71(2), pages 435-462, August.
  3. Sebastián Claro, 2003. "Tariffs, Technology and Global Integration," Documentos de Trabajo 240, Instituto de Economia. Pontificia Universidad Católica de Chile..
  4. Thierry Verdier, 2005. "Intégration commerciale « socialement responsable » : une approche en termes d'économie politique," Revue d’économie du développement, De Boeck Université, vol. 19(4), pages 55-121.
  5. Caroline DAYMON, 2012. "Ouverture Commerciale, Inégalités De Revenu Et Répartition Salariale Dans Les Pays Du Sud Et De L’Est De La Méditerranée," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 35, pages 81-98.

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